Setting the desired VAT pricing model is an important business decision which affects crucial things like cart-abandonment and buying experience
WooCommerce and EAS EU VAT compliance systems support both inclusive and exclusive merchandise pricing.
The choice of using inclusive or exclusive models depends on setting of tax options by the shop administrator. To some extent the choice also depends on the country of the shop registration and the main market for which the shop operates.
The common pricing practice in Europe is to display prices that already incorporate VAT. European customers might have a negative reaction if taxes are introduced during the checkout process.
EAS advises presenting European prices inclusive of taxes to provide a more transparent and customer-friendly experience.
What's the difference between inclusive and exclusive tax calculations?
Inclusive pricing example:
Sale to France
Visible Product price on website: 50 EUR
The including VAT is calculated at the checkout based on the destination country.
Checkout:
Total cost of the Product 50 EUR
Including 8.33 EUR VAT (20%)
VAT 0% cost 41.67 EUR
Inclusive prices will slightly differ from country to country due to the difference of VAT rates.
If you wish to display the same prices for all EU customers, enable setting in the EAS plugin:
WooCommerce → EAS EU compliance → Taxation Check the option "Freeze prices for all countries"
Save settings.
Exclusive pricing example:
Sale to France
Visible Product price on website: 50 EUR
VAT is added at the checkout based on the destination country.
Checkout:
VAT 0% cost 50€
VAT 10€ (20%)
Total cost of the Product 60 EUR
Such setting may require additional adjustment on the EAS side, please confer to EAS support for help and navigation.